"Effective Means of Enforcing Rights" : An Additional Sword for Investors Against Developing Nations?
Kishan Kumar Gupta & Kashish Sinha
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In the sphere of international investment arbitration, the discourse on conduct of host states in providing access to judicial remedies to an investor has stagnated on the highest standard of treatment i.e. denial of justice. Owing to the same, a diluted standard in the form of “effective means” has been brought to the disposal of modern-day investors to counter the inadequacies of the defaulting state’s judicial mechanism to enforce its rights. While “denial of justice” remains an overused and over-analysed standard, the “effective means” standard is gaining prominence nowadays. Nonetheless, the standard remains half-baked and only superficial. This paper attempts to trace the inception and explore the shift of balance of convenience in favour of the investors against the developing nations, brought about by this ‘newly-found’ treaty standard. In doing the same, the paper seeks to analyse recent arbitral awards and highlights the importance accorded to the effective means standard owing to its wording, placement and linkage to other operative parts of a relevant BIT. The paper also seeks to redefine this misinterpreted first-world favouring treaty standard and attempts to renegotiate the standard to the interests of developing nations, which due to insufficient resources and court congestions might face difficulties in providing such a standard of protection. In doing so, it looks into some pending cases initiated by investor in developing nations like Nigeria and Bangladesh, which may, in future, result in invocation of the said standard under the relevant investment treaty.